$68,505 cell phone charge? “Bill shock” relief on the way

Heard the one about the $68k cell phone bill? The FCC has, and today it …

The Federal Communications Commission proposed new rules today that would alert smart phone users when their mobile phone usage is about to ring up "unexpected charges"—a phenomenon commonly referred to as "bill shock."

The recommendations come as the FCC disclosed that it has received numerous complaints, including one about a $68,505 cell phone bill.

As FCC attorney Rebecca Hirselj put it at today's Open Commission meeting, the proposals would require that mobile service providers offer, first, "automatic notifications, such as voice or text alerts, when subscribers are approaching or reach a monthly allotment limit of voice, text or data usage that would result in overage charges."

Second, carriers would have to provide "automatic notifications when consumers are about to incur international or other roaming charges in excess of their normal rates."

More shockers

The Notice of Proposed Rulemaking arrives as the FCC releases shocking new statistics on the bill shock problem. Among them:

764 people complained to the FCC about wireless bill shock in the first half of 2010.

67 percent of those complained about amounts of $100 or more.

20 percent had complaints of $1000 or more.

The largest complaint received during this time was for $68,505.

In May, the Commission released a report suggesting that about 30 million Americans have experienced bill shock "in one form or another."

The FCC's Notice also notes that many consumers are unaware of tools they can deploy to prevent nasty bill surprises, such as usage caps. And so it proposes that carriers make "clear and ongoing disclosure of any such tools that they offer, including any applicable fees for those services."

With reservations

The Notice received support from the FCC's senior Republican Commissioner, Robert McDowell, with some reservations. In his comments, he acknowledged those 764 bill shock complaints in the agency's new report. But, "although that made it into the white paper, America is home to an estimated 295 million mobile wireless subscribers," McDowell noted. His point: bill shock should be considered "in the context of all of the data that is currently available."

Most of the carriers push back against these proposed regulations, arguing that they already provide consumers with a wide variety of tools for keeping up with their mobile bills. Sprint, for example, sent us a copy of the provisions it offers, including a plan in which, for the first six months of the contract, new customers receive email notifications if they have incurred $10 or more in text, voice, or data overcharges.

"We agree with the FCC that the goal is to keep all customers happy," CTIA - The Wireless Association responded, "but we are concerned that prescriptive and costly rules that limit the creative offerings and competitive nature of the industry may threaten to offset these positive trends."

On Wednesday, FCC Chair Julius Genachowski laid out the scope of the bill shock problem at a talk before the Center for American Progress. His remarks anticipated these concerns:

"I know that some will argue this is unnecessary or burdensome," Genachowski told the gathering. "But consider what I heard this morning from a business executive. He said that a couple of months ago he had incurred $2,000 in extra data charges while on a trip overseas, despite buying an 'international plan'—in his words he was billed for—quote—'more than 15 times what I had expected to pay.' He said: 'It took hiring a lawyer to get the charges waived - cost me almost as much as the charges, but I did it for the principle.' Most Americans would not have his luxury."

Matthew Lasar / Matt writes for Ars Technica about media/technology history, intellectual property, the FCC, or the Internet in general. He teaches United States history and politics at the University of California at Santa Cruz.